09 February 2004 00:00 [Source: ICB Americas]Manufacturing activity was up again in January, with both global and US manufacturing indices increasing. US manufacturing recorded its eighth consecutive month of gains, while global manufacturing reached a four-year high.
In the US, the Purchasing Mana-gers' Index (PMI), a measurement of manufacturing activity from the Insti-tute of Supply Management (ISM), reached 63.6 percent, a slight gain over December's PMI of 63.4 percent. A reading above 50 percent indicates that manufacturing activity is generally expanding.
"The [US] manufacturing sector gained momentum in January as the PMI continued to accelerate," says Nobert Ore, chair of ISM's manufacturing business survey committee. "Both new orders and production remain quite strong, indicating that the manufacturing sector is experiencing a much needed recovery. The prices index accelerated significantly as the metals and energy categories showed significant price volatility."
ISM's New Orders Index was 71.1 percent in January, a small decline from the December level of 73.1 percent. ISM's Production Index rose from 62.9 percent in December to 71.1 percent in January.
ISM's Price Index in January reached 75.5 percent, up from December's 66 percent, making it the highest reading since March 2000, when the index was 78.7 percent. The chemical commodities re-ported by the ISM survey to be up in price were ethylene, polyethylene, polyethylene film, propylene, polyvinyl chloride and sulfuric acid. Caustic soda was the only chemical commodity for which prices dropped.
The US continues to set the pace in the rebound in global manufacturing, which also rose slightly in January. The global PMI reached 57.1 percent, up slightly from December's reading of 57.0 percent. The global PMI is a global composite produced by JPMorgan, ISM, the International Federation of Purchasing and Materials Management and NTC Research.
"The start of 2004 has seen continued, robust, broad-based expansion of the global manufacturing economy," says David Hensley, director of global economics coordination at JPMorgan. "Output and new orders are booming, although there has yet to be a decisive strengthening in employment. As anticipated by the PMI, global industry is expanding at a 10 percent annual rate."
The Global Manufacturing Output Index was 61.0 percent in January, up from 60.6 percent in December, marking the sharpest growth in production since the series was first compiled in January 1998.
The Global Manufacturing Input Prices Index reached 61.9 percent in January, up from 57.2 percent in December, signaling the most significant inflation on input costs in three years.
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